On 28 November 2013, the British Virgin Islands
("BVI") and the United Kingdom, via an
Exchange of Letters amending their existing 2008 Tax Information
Exchange Agreement, agreed to permit the automatic exchange of
financial information relating to United Kingdom tax payers who
hold accounts in the BVI ("UK IGA").
An agreement was also signed to improve international tax
compliance, setting out precise details of the information which
will be automatically exchanged.
The conclusion of this arrangement follows the signing of
similar agreements between the UK and the Cayman Islands on 5
November 2013, the UK, Jersey and Guernsey on 22 October 2013, and
the UK and the Isle of Man on 10 October 2013.
The UK IGA largely tracks the draft Model IGA produced by the US
Treasury ("US IGA") in relation to the
US FATCA legislation ("US FATCA
Regulations"). Most of the key terms and
definitions of the US IGA are reflected in the UK IGA, including
the scope of the definition of a financial institution
("FI") that will be subject to the UK
IGA (and related law). An FI will include a Custodial
Institution, Depository Institution, Investment Entity, or a
Specified Insurance Company, which in practice will cover banks,
custodians, nominees, trust companies and trusts, investment funds,
administrators, managers and advisers, as well as certain insurance
As the UK IGA is not based on any UK legislative equivalent to
the US FATCA Regulations, the UK IGA does not include provisions
dealing with or otherwise relating to withholding taxes and
penalties, or registration requirements. The UK IGA does
however contain similar Annexes to that of the US IGA, in relation
to due diligence procedures and exemptions from application.
As with the US IGA, unless they can avail of one of the
exemptions FIs will be obliged to undertake prescriptive due
diligence obligations for identifying reportable accounts under the
The UK IGA compels BVI FIs to report information annually to the
BVI Financial Secretary (or a person designated by him) on
financial accounts that are held by UK individuals or entities
controlled by UK persons. The Financial Secretary will then
forward the UK tax payer information to HM Revenue and Customs.
Additionally, the UK IGA contains details of the alternative
reporting regime for UK resident non-domiciled
For our prior client update on the US FATCA Regulations, please
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This webcast focuses on the impact FATCA and CRS are having on structured finance vehicles set up in the BVI, Cayman Islands and Ireland and covers in detail the impending reporting and notification deadlines in each of these jurisdictions.
On the 9 September 2016 the MFSA issued feedback to its consultation of the 1 April 2016 in relation to intra-group loans.
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